Battery stocks are a compelling investment opportunity that every investor should consider. These companies offer significant growth potential and play a crucial role in the global transition to a carbon-free energy model. As the world rapidly shifts towards renewable energy and electric vehicles (EVs), battery technology is becoming increasingly important. This forms my article for these best battery stocks to buy.
In this article, we’ll explore three battery stocks that are solid buys for investors. These companies may be undervalued due to their impressive growth prospects and the possibility that the market is mispricing them relative to their potential performance in 2024.
These three undervalued stocks represent exciting opportunities for investors looking to benefit from the growing demand for battery technology in 2024 and beyond. By investing in these companies now, investors can potentially reap significant rewards as the market recognizes their true value.
So here are three battery stocks for investors to consider:
Albemarle Corporation (ALB)
Albemarle Corporation (NYSE:ALB) is one of the world’s largest producers of lithium, which is a critical component in the production of batteries for electric vehicles and renewable energy storage.
For this year, ALB has reported an adjusted EBITDA of $291 million on net sales of $1.4 billion. The company’s profit margin stands at a modest 4.02%, and its operating margin is -10.6%. Return on assets is -2.68%, while return on equity is 3.86%.
Albemarle has a dividend yield of 1.39%. However, Albemarle’s quarterly earnings and revenue growth have declined substantially. Revenue is down 47.3% and net income is down by 99.8%.
However, these teething issues are usual for cyclical companies like ALB which are still scaling their production. I also think that its shares could be entering into a buying zone based on a recent development.
ALB faced a steep stock drop after announcing a $2.3 billion convertible preferred stock issuance in March, surprising investors. This news sent shares down by nearly 18%, before a partial rebound. Its shares are now down 47.53% over the past year.
As ALB looks to head towards a bottom, its risk-to-reward profile improves if one is bullish on the battery industry as a whole, making it one of those best battery stocks to buy.
Panasonic (PCRY)
Panasonic (OTCMKTS:PCRFY), a well-established player in the battery industry, is known for its long-standing collaboration with Tesla (NASDAQ:TSLA). However, the company is making significant strides in the market on its own, proving that it is not overshadowed by its partnership with the electric vehicle giant.
Moreover, Panasonic announced ambitious plans to substantially increase its annual production capacity for EV battery cells, setting a target of 200 GWh by March 2031. This move would effectively quadruple the company’s current battery production. In addition, Panasonic is also exploring innovative battery solutions, such as cobalt-free options and cells with an impressive energy density of 1,000 Wh/l.
Given these developments, there is a strong case to be made that Panasonic’s stock is currently trading at undervalued levels.
PCRY is making some serious moves in the battery space, so I think it’s one of the best battery stocks for investors to buy this month.
Piedmont Lithium (PLL)
Piedmont Lithium (NASDAQ:PLL) is a promising investment opportunity for those seeking substantial returns from the growing lithium market. The company is developing a lithium project in North Carolina that has the potential to become one of the largest lithium sources in North America.
In the first quarter of 2024, Piedmont Lithium reported a revenue of $13.4 million and ended the quarter with a cash balance of $71.4 million. The company’s North American Lithium (NAL) operations achieved record production, with 40,439 dry metric tons of spodumene concentrate produced during the quarter.
Looking ahead, Piedmont plans to double its spodumene shipments in the second half of the year, targeting an annual production of approximately 126,000 tons. The company is implementing a cost-saving plan to reduce operating expenses by $10 million annually to improve its financial position. Additionally, Piedmont has deferred some capital expenditures initially planned for 2024 to 2025.
I believe that PLL is a strong buy for all of these reasons.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.